Singapore’s unemployment rate unexpectedly rose and growth in South Korean industrial output slowed in March, underscoring the continued impact of Europe’s crisis on Asian economies reliant on trade.
The jobless rate climbed to 2.1 percent in the first quarter of the year through March, from 2 percent in the previous quarter, which was near a three-year low, the Singaporean Ministry of Manpower said yesterday.
South Korea’s production rose 0.3 percent from a year earlier after rising a revised 14.3 percent in February, Statistics Korea said.
Asian central banks are juggling the need to dampen inflationary pressures and bolster growth, with Europe’s debt crisis and a slowdown in China’s expansion weighing on the global economic outlook.
Singapore’s industrial production shrank in the first quarter, the Bank of Korea (BOK) lowered its full-year growth forecast last month and Japan reported last week that industrial production rose less in March than economists estimated.
“We have seen clear deterioration in various momentum indicators,” said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB.
“This reflects weakness in demand from Europe and the US and a slowdown in China. Europe will be weak even if it emerges out of recession so the impact on Asia will still remain,” he added.
Singapore’s economy added 27,400 jobs last quarter, compared with 37,600 in the previous period. The jobless rate of 2.1 percent in the first quarter compared with the median estimate of eight economists surveyed by Bloomberg News for a rate of 2 percent.
The services industry added 19,800 jobs last quarter, while manufacturing companies cut payrolls by 500, the report showed, citing preliminary data.
Construction employment rose 8,000 in the three months through March. Singapore’s industrial production in the first quarter dropped 1 percent.
Singapore’s GDP would probably increase by between 1 percent and 3 percent this year, the central bank said in a macroeconomic review yesterday, reiterating earlier forecasts. Employment might grow at a slower pace this year, even as local wages potentially climb at a “healthy” rate, it said.
South Korea’s production fell 3.1 percent from February when it gained a revised 0.6 percent. Seoul’s index of leading economic indicators rose 0.4 percent in March from February, compared with a 1 percent gain in February, yesterday’s report showed. Sales of consumer goods dropped 2.7 percent from February and were unchanged from a year earlier.
Several semiconductor chip producers and other technology companies cut inventories last month, probably ahead of the release of new products, which could bode well for production in coming months, South Korean Ministry of Strategy and Finance Director-General Choi Sang-mok told reporters in Gwacheon.